Partnering to Expand an Innovative Inclusive Agricultural Market Ecosystem Model: Hilltribe Organics and iDE
In the ever-evolving landscape of international development, NGOs and social enterprises have now fully recognized the potential to increase the overall impact of their support to businesses and communities in historically marginalized communities and demographics through strategic partnerships. By working together, an NGO and a social enterprise can leverage each other’s methodologies, talent, and networks to increase the overall flexibility, innovation, and sustainability of their individual models toward triple bottom line results for the people they serve as clients or customers.
From 2020, social enterprise Hilltribe Organics (HTO) and Posner founding tenant and international NGO iDE have embarked on one such partnership in order to deepen HTO’s innovative model in Thailand and expand into other markets. The partners are exploring the potential for inclusive business models in organic agriculture production toward improved income and livelihood opportunities for low-income communities, integrated with organic farming practices toward sustainable green growth pathways for isolated communities in Northern Thailand and beyond.
The hill areas of Northern Thailand are breathtakingly beautiful, home to a highly diverse mix of ethnic minority communities for centuries, including the Akha and Karen tribes. Neither Thai nor Burmese, these communities are socially isolated and marginalized, experiencing language barriers with central Thai market actors and lack of recognition as formal citizens of Thailand. This marginalization is most acutely expressed through a relative lack of access to public services including education, water and sanitation, electricity, healthcare, and safety and security. Economically, Akha and Karen communities’ incomes—predominantly derived from agricultural production in maize, rice, coffee, tobacco, and livestock—have been historically constrained due to climate and altitude conditions that result in only one growing season per year. Moreover, lack of access to major markets and market price volatility constrain consistent, yearlong income streams and drive outmigration. The typical farmer’s income of USD 150 per month is well below the poverty line in Thailand, which has driven these communities to shrink as their children leave for the cities in search of a better life – which they rarely find – resulting in older and older farmers. How to restore and sustain these communities is a fundamental challenge to sustaining the livelihoods and culture of the Akha and Karen communities.
The Social Enterprise Partner: Hilltribe Organics
HTO is a social enterprise aiming to transform the lives of poor ethnic minority communities in Northern Thailand through inclusive market access combined with a commitment to fully organic production. By transferring knowledge of organic agriculture and growing the skill sets of the farmers and their families, HTO aims to at least double family income and create real and lasting social change and development within and across hill tribe communities. HTO’s core business is to contract hilltribe farmers in the Chiang Rai province of Thailand, of whom 50% are women, to produce free-range, organic eggs, which are sold in premium markets both domestically and abroad. HTO provides farmers with the necessary inputs including chickens, and skills in organic egg production through a one-month training program, in exchange for the guarantee that they will sell their eggs to HTO at a fair and agreed upon price. The company then sells the eggs to direct consumers and retail customers. HTO also contracts the farmers to produce organic chicken feed to ensure their eggs are fully organic. Moreover, HTO aims to work with existing natural and social ecosystems within the Thai hill tribe areas to offer superior organic products that generate knowledge and income to uplift communities while respecting and preserving their unique way of life. HTO was founded in June 2013 by four experienced Asia-based entrepreneurs, including Co-Founder and CEO Richard Blossom who previously ran PepsiCo USA, PepsiCo Asia, and Del Monte International. The company’s founders have also expanded their mission beyond eggs to other organic food products including rice and chia pastas through the Perfect Earth brand.
HTO’s eggs are the #1 brand in Thailand, and HTO is currently the only company in Thailand selling organic eggs certified by ACT Organic Standards. HTO markets the eggs free of hormones, antibiotics or chemicals and they are on the menu at select restaurants and hotels, as well as sold in major supermarket chains. Additionally, HTO has established an export market to Hong Kong. HTO’s Thailand operations are in Wawee (Production, Logistics), Chiang Rai (Operations, Processing), and Bangkok (Marketing, Sales). HTO’s high-impact model at least doubles — and typically triples — farmers’ incomes and leads to long-term improvements in livelihoods, and improved month-to-month control over their household incomes as a result.
The NGO Partner: iDE
iDE is an international nonprofit and social enterprise incubator that believes that the best way to end poverty is to empower entrepreneurs to develop inclusive market ecosystems. Across a variety of sectors including agriculture, WASH, climate resilience, nutrition, and local economic development, iDE coaches businesses that improve their communities and stimulate the market ecosystems in which they operate, helping them to succeed and multiply. In addition to sustainable economic prosperity, iDE ensures that these businesses foster gender equality and social inclusion, protect the environment, and build resilience to climate change. To do so, iDE acts as an “honest broker” in the market, working as a scaling intermediary that facilitates an interconnected series of market relationships and long-term partnerships between the firms, farms, and supporting private/public stakeholders that make up the market system for inclusive solutions. By scaling up this model, these entrepreneurs can convert inclusive market ecosystems in their community and local market contexts into more inclusive economies that reach millions of people who realize the economic and social possibilities to which they aspire.
At iDE, social enterprises are part of the organization’s DNA. iDE’s first social enterprise dates back to 1983 when Paul Polak and Gerry Dyck established a small but ambitious Somali startup that manufactured and sold dozens of donkey carts, equipped to carry food and water into refugee camps, thereby saving hundreds of lives and earning a profit for farmer operators. Since then, iDE has incubated multiple social enterprises, including Hydrologic (ceramic water filters) and Lors Thmey (agricultural extension) in Cambodia, Sama Sama (sanitation) in Ghana, iDEal Tecnologías (microirrigation) in Nicaragua, an Lima Links in Zambia (digital agricultural extension). The organization has also supported the startup, expansion and/or refinement of independent social enterprises around the world, including Futurepump, Proximity Designs, and Thermofluidics Ltd .
A Partnership Focused on Shared Value
HTO and iDE were introduced in 2019 through LGT Venture Philanthropy (LGT VP), an independent charitable foundation of the Princely Family of Liechtenstein and LGT – the world’s largest privately-owned Private Banking and Asset Management group. LGT VP supports organizations and companies who implement solutions that contribute directly to the achievement of the Sustainable Development Goals, and invested in HTO from 2014.
In 2020, with the support of LGT VP, HTO and iDE developed a partnership focused on several key areas of shared value including shared learning of each other’s models and methodologies, such as iDE’s Commercial Pockets Approach for supporting isolated market ecosystems, and enabling their teams to regularly engage with one another in order to transfer valuable skills from both social enterprise and NGO competency areas. Most importantly, iDE is accelerating HTO’s exploration of market expansion opportunities by leveraging its expertise in human-centered design (HCD) to organize and conduct HCD rapid market assessments to identify new markets for expansion and/or replication of HTO’s model in other countries and/or products. This process involves identifying the product-market fit of the HTO model in other country contexts, focused not only on wider market trends but also the the needs, motivators, barriers, and accelerators across key market actors in those contexts to inform the design of a localized business model for HTO. iDE’s market discovery assessments add value to HTO’s strategic planning due their emphasis beyond traditional market research approaches, as HTO is not dealing in traditional, formal markets but in under-resourced, informal ones where it is essential to understand the motivations and behaviors of all actors for long-term sustainability.
Looking forward, from 2021 HTO and iDE aim to continue to deepen their partnership toward increased market share for HTO globally, and replication of HTO’s model where appropriate across iDE’s global programming portfolio. The results of this collaborative effort include not only enabling valuable learning and innovative co-creation between a social enterprise and international NGO, but to ultimately accelerate the identification of ways to scale an innovative model of economic empowerment for historically marginalized communities that results in “win-win-win” outcomes for those communities, the social enterprise, and the NGO.